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Startup Valuation in the News

@WSJSTARTUP: Young companies like Snapchat and Honest Co. made headlines this week, in part due to new investment rounds that boosted their valuations.

Three-year-old photo- and video-sharing app Snapchat is now valued at about $10 billion, up from about $2 billion just one year ago, according to an article in today’s Journal. In May, venture-capital firm Kleiner Perkins Caufield & Byers committed to invest up to $20 million in the fast-growing startup, which has yet to generate any revenue, it says.

In preparation for an IPO, Jessica Alba’s The Honest Co. has raised $70 million at a valuation just shy of $1 billion, the Journal’s Venture Capital Dispatch blog reports. The eco-friendly baby line receives most of its revenue from a monthly subscription service that delivers nontoxic diapers and other consumable products, writes reporter Lizette Chapman. It was previously valued at about $300 million.

Other companies whose valuations rose this month include gaming company Kabam Inc., now believed to be worth more than $1 billion, and viral content company, Buzzfeed, currently valued at $850 million.

See what entrepreneurs and investors have to say about startup valuations here on The Accelerators. Join the discussion by posting a comment to any of their essays (no registration required) and take our reader poll below.

Comments (1 of 1)

The average VC has only one plan that he/she seems to keep trying again and again. Find a company that has a lot of freeloader users and then try to turn these freeloaders into money-makers.

Have you ever seen a snapchat user? do you know how they think? how much money they have?

SnapChat may have a billion users, but none will pay, or buy anything because they saw an Ad. After all, the same person is wasting time on facebook and yo and instagram and twitter, ... and the same Ads are being ignored by him on all of these time-wasting sites.

They say 9 out of 10 ventures fail, ... but it can be predicted. As long as VCs chase only eye-balls, and hope to make money from freeloaders, the VCs will be milked for what they are worth by clever entrepreneurs who will feed them eye-balls. The world has 7 billion people, and new users of smartphones are being born every minute, ... getting freeloaders to use time-wasting Apps is becoming easier everyday

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